Weekend Warrior

Stocks rebounded in a moribund fashion Friday in weak volume. The S&P 500 managed to reclaim its 50 day MA, but the Nasdaqs efforts were not rewarded the same way. The light trade did put a damper on the mild comeback. For the week the Nasdaq lost 2.5%. On its weekly chart it looks like it could be forming a long cup with handle that commenced on 11/2/07 at 2861.51, with the handle starting on 2/18/11 at 2840.51. The handle has some flaws as it is materializes. High volume and cutting under its 50 day MA. A move above that 50 day line way provide some comfort, but that is a big if right now. The S&P 500 lost half of what the Nasdaq did this week, and its handle seems to be forming a little healthier. It began developing also on 2/8/11 at 1344.07 and has come in lighter volume and is above its key 50 day MA. The relative underperformance of the Nasdaq compared to the S&P 500 is the chip element versus the energy element in the S&P. The weekly chart that looks the worst this week is easily the SMH. It lost nearly 7% this week and cratered below its 50 day MA Wednesday and even more Thursday. When a leading sector gets hit like that cash is king. AAPL is the last of the big tech stalwarts that is clinging on to 50 day support. NFLX AMZN GOOG all have fallen below that key line. Energy, miners and steel equities rallied in a perverse way Friday in reaction to the horrible news from Japan, that seems to get worse over the weekend. Lets give the market some credit for rallying amongst some pretty awful events, but to me its been looking tired and fragile for a couple weeks now. Can the market continue it "wall of worry climb"? Of course it can. But to me a dead cat bounce in an evolving correction looks more likely. Or by the time Monday morning comes and the nuclear news from Japan worsens who knows what can happen. Keep your 22.30 SDS buy stop in place. Be smaller, cut losses quickly and respect the indicies moves. Economic news Friday included Chinas troubling inflation picture which could require more tightening. Retail sales were mixed, sentiment weak and business inventories data benign. Not much to speak of on the earnings front Monday morning but later in the week some heavy hitters such as LULU FDX NKE report.

As cautious as I am their are some buy points to bring to the table. Flat bases are DHR 52.31, EMC 27.57. Cup with handles are MRO 52.89, GFI 18.43. ABX 54.36 in a double bottom with handle buy point. DTV 47.00 in a 3 weeks tight pattern. PLL broke out from a short consolidation on excellent earnings reported Thursday after the close.

Stocks near 50 day support are PAG 18.50, BWA 73, ALTR 39.70, AVGO 30.50, KLAC 45, TEL 36.50, CAT 98, DOV 62.50, CAM 55, MDR 22, PTEN 24, RDC 37.75, DNR 21, WMB 27.90, NBR 25.10, RES 18, NWL 19, JNPR 40, PLCM 45, LLL 78, RAX 35.35, CMG 240, LTD 30.90, JWN 43.50, PETM 40.75, LYB 37, RAI 33, KKR 16, NDAQ 26.10, AMTD 20.95, URI 28.50, ADP 48.05, IBM 159, SWK 72, TIBX 23, VRSN 34.50, RJF 36.25, WDR 38.15, TER 16.50, ARBA 28, ADS 76, APKT 65.50, MTW 17, BGC 40, AET 35.40, CMCSA 24, WU 20.50, TJX 48.20. Stocks that found 50 day support Friday were GSM CAT BEXP CNQ CHK CVX SU SUN ATW EMR DECK NKE PVH AAPL RVBD GD LMT LULU CBI ERJ IVZ TIF DD EMN PPG WYNN BUD AMP BX CTSH ACN KBR WY BMC CHKP INFA KSU JPM COF JDSU ARW NCR ADTN NXPI. Energy stocks that found 50 day support on Thursdays carnage and still above that line are CXO BHI PXD RIG DVN VLO XOM WLL HAL EXXI OIS HOC NOV NBL. Stocks that can be purchased and the buy stops as they reclaim their 50 day MAs are TRW 59, MXIM 26.40, TXN 35.10, APC 78.25, OXY 100.45, BTU 64.25, PXD 96.50, NXL 19.25, CRZO 34.75, ABV 28.25, ORCL 32.60, FDX 93.25, UNP 96, IBN 46.25, LAZ 43.60, ASML 42, TTM 26.75. Stocks that reclaimed their 50 day MAs Friday were UPS ATI.

Stocks near 200 day support are MGA 45, LLTC 32, MSCC 19.25, MIPS 10.50, MT 33.50, MTL 25.75, JRCC 19.25, WFT 18.95, RIO 61, VALE 31, LDK 9.90, FFIV 105, BBBY 43.90, MAR 37, HOT 54.25, INFY 66, RHT 39.25, ROVI 51, VMW 81, CHRW 70, EXPD 47, STT 41.80, BEAV 33, FNSR 23, GR 79.50, AMT 49.50. Stocks that found 200 day support Friday were F BRCM SCCO CCL LVS VMW FNSR SNDK. NTAP found 200 day resistance Friday on a decent tape, looking eerily similar to HPQs recent action below the 200 day. UPL can be bought through 45, its 200 day MA. Stocks that can be shorted at 200 day resistance are AEM 68.75, BBD 19.

Bullish gap ups still trading very tightly which must construed positively in a feeble market are RL TBL DHR ARUN EL ROST WFMI CMCSA DIS IBM MMC CCK HS. OKE has been trading very tightly at all time highs despite recent market weakness.

Stocks which can be shorted at 50 day resistance are TEN 42, ARMH 23.75, ADI 39.35, CY 21, SWKS 33.40, RS 54, TKR 49.75, AVT 35, JOYG 92, PH 88.50, HES 81, SLB 88, CLF 90, SWC 22.90, AGCO 53.25, DE 90.25, NOC 68, CE 42, NFLX here, FISV 61.75, TROW 67. SMH 34.90 (semi ETF). Sell stops can be placed on the following as they pierce their 50 day MAs to the downside. JCI 40, COST 72.25, WAG 41, WSM 34.75, PAYX 32.50, INTU 48.75, HON 55. Stocks displaying relative weakness Friday were MCP NOC GOOG SOA WCRX. RCL RHT look to be forming head and shoulder patterns.

Good luck.

The author owns FCX.